Credit Card Companies

Credit card reader in taxi drivers hand in carIt’s a situation that’s familiar around the world. You’re in a foreign land, on a business trip, and you’ve just arrived at the airport. It’s late, you’re pretty fried from the trip, and you can feel the emails piling up in your inbox (but can’t start tackling them because data roaming is so expensive).

So you get in a taxi and wave your credit card in a meaningful way. “Ah sorry, the machine is broken!” is the response you get – or the local language equivalent. This is despite a big fat sticker on the taxi’s window proclaiming to the world that the driver is pleased – no, let’s say glad – actually, let’s call it PROUD to accept all major brands of credit card.

“Can you pay by cash instead?”

It took me some time to figure out that it’s not a terrible reliability issue with the credit card terminals (oh, how I now yearn for the days of the “ritsch ratsch” or “zick zack” machine which would make a carbon copy of your credit card on a little payment slip).

The truth is much more worrying for credit card companies: I think there’s an unwritten but global reluctance by taxi drivers to pay the credit card companies’ overheads. This has to be combined with the fact that cash is untraceable, and therefore much easier to simply slip into a pocket and circumvent official payment / taxation / reporting processes, of course.

In the past, I’ve fallen for the “broken” machine trick and reluctantly dug into my reserves of foreign cash – or even agreed that the driver should take me on a diversion via a cashpoint, and wait – of course keeping the meter running – while I grabbed some local dollar.

Recently, my more stubborn approach of pointing out that since the sticker’s on the window, maybe the driver would like to have a go at fixing the problem, seems to be working. Maybe I’m just lucky, because each and every time I’ve suggested this, the credit card machine has miraculously come back to life, once it has been dug out of the glovebox, or from deep under the passenger seat …

The moral of the story being that perhaps one of the major credit card companies could absolutely and comprehensively corner the market for card acceptance in taxis simply by revisiting the merchant fees charged to taxi drivers – which appear to run to a maximum of 3 percent, according to the results of some Googling. Or perhaps some kind of points system where the drivers would be incentivized to accept your piece of proffered plastic. This would also be good for the credit card companies’ PR – after all, it’s hardly reassuring when your first attempt to use your plastic in a distant land is rebuffed.


By Simon Jones – Managing Director of OnPR, GmbH

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